Autumn Budget 2018 – Employment Implications

Yesterday Philip Hammond, the Chancellor of the Exchequer, delivered his Autumn Budget for 2018. The main implications for employers and employees are summarised below.

Wages

From 6 April 2019:

The National Living Wage for workers aged 25 and over will increase from £7.83 to £8.21; and

The National Minimum Wage rates will be increased from:

£7.38 to £7.70 for 21 to 24 year olds;

£5.90 to £6.15 for 18 to 20 year olds

£4.20 to £4.30 for 16 and 17 year olds; and

£3.70 to £3.90 for apprentices

Tax

In the 2018/19 tax year the personal allowance will be increased from £11,850 to £12,500 and the higher rate threshold will be increased from £46,350 to £50,000.

Termination Payments

The introduction of employer National Insurance Contributions on termination payments over £30,000 has been delayed for a further year until April 2020.

Changes to Off-Payroll Working in the Private Sector

The Government has announced that large and medium sized businesses in the private sector will be responsible for deciding whether the off-payroll working rules will apply. Where they do apply, the business, agency or third-party paying the individual’s intermediary will need to deduct income tax and National Insurance Contribution before making the payment. The definitions of large and medium sized businesses have not yet been released, but it is thought that the Government will use similar criteria to define small businesses as is currently within the Companies Act 2006. The changes are expected to be introduced from 6 April 2020, with the government publishing a further consultation in the coming months and draft legislation expected in summer 2019.

"The rise in the national minimum wage was to be expected as this is increased annually. More surprising was the delay in imposing employer’s NI on termination payments over £30k although this is good news for employers especially when dealing with settlement agreements for senior executives. If you would like any further advice, please get in touch with a member of the team."

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